EU Ferro-silicon Prices Decline Amid Unfilled Safeguard Quotas

European ferro-silicon prices have declined since the EU's safeguard quotas were renewed in May, primarily due to a substantial overhang of low-priced inventory imported before the initial safeguard implementation in November 2025. This ample supply in European warehouses has reduced the pressure to import material and fill the quotas, leading to sluggish spot trade.

Prices have fallen by 3.6% since the start of the third safeguard period on May 18, with recent assessments at €1,240-1,280/t ddp NWE. While smaller quotas for countries like Brazil have already been filled, larger allocations from Norway and Iceland are progressing more slowly. Many suppliers have withdrawn offers, anticipating higher prices once the quotas are more depleted, and near-term trading is expected to remain muted due to slow steel demand and a seasonal slowdown.

However, recent jumps in silico-manganese prices, after its quotas filled in May, suggest buyers may soon seek to secure low-cost ferro-silicon units. Once the allocated safeguard quotas are exhausted, ferro-silicon importers will face a significantly higher minimum import price of €2,408/t, compared to €1,392/t for silico-manganese. This makes out-of-quota imports risky, potentially leading to substantial losses unless European prices increase.

Silicon metal, which can partially substitute ferro-silicon, is becoming a more attractive option for buyers looking to avoid higher ferro-silicon costs. Lower import prices for silicon metal from Angola and China are driving this trend. Although silicon metal was excluded from the safeguard measures, European ferro-silicon producers are concerned about its competitive impact. The historical premium of silicon metal over ferro-silicon has narrowed since 2022, further enhancing the appeal of substitution.